BDEW 2012 Congress
Müller: Lack of market signals for billions of investment
Amendment of the Renewable Energy Sources Act (EEG) is an urgent problem / Grid extension is the decisive determinant for the development of renewable energies
Berlin, 26 June 2012 – The motto of this year’s BDEW Congress is: „Markets of tomorrow – between competition and regulation“. „Fundamental questions of the energy sector arise in this context. The first question is whether and how incentives need to be set in future in order to be able to continue to operate conventional power stations and to construct new power plants. Due to the continuous development of renewable energies and the associated attenuating effect on Energy Exchange prices, the price signals required to initiate billions of investment in new power stations are currently not sufficient“, Hildegard Müller, Chairwoman of the General Executive Management Board of the German Association of Energy and Water Industries (Bundesverband der Energie- und Wasserwirtschaft - BDEW) declared.
The result was that the current energy-only market model was likely to be no longer sufficient. „Instead we must probably arrive at a future market scheme which enables power to be paid“, Müller said. The way of marketing generation or power provision, respectively, for instance through tendering or Exchange models had still to be discussed in detail.
It was essential in the long term to integrate renewable energies step by step into the market and to incorporate them with the market of conventional energy generation into a possibly completely new market design. „However, the future market design should not constitute a comprehensive government subsidy model but a market solution. It should not be developed for Germany alone but for the entire European energy market. Within the BDEW we are about to consider and assess potential models and make relevant proposals“, Hildegard Müller declared. The market model of the future need not be completed immediately but as soon as possible. „A solution is needed by the year 2014/2015, at the latest.“
One of the most urgent problems at the present time was the amendment of the Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz - EEG). Müller: „The model of a future electricity market must enable a quantitative growth of renewable energies to be continued, for this is the only way for us to achieve the political targets in terms of climate protection.“ It had to be designed in a way so as to promote innovations with a view to developing the components required in future for safeguarding system services. „But the model of the future must also reconsider priority rules, not only in terms of conventional power stations but also with regard to renewable energies – of course always against the background of current research and development in this area. This scheme must ensure that we take the most cost-efficient path and it must be part of a competitive market so that we make sure to obtain a sustainable solution compatible with the EU“, Müller emphasised.
According to Müller, another decisive determinant for the development of renewable energies is the extension of the necessary electricity rights-of-way. „Feed-in of renewables-based electricity is not possible without networks. We need a regulation which for instance determines that additional development of renewable energies with priority feed-in is not possible if the network development in the region concerned has not reached yet the necessary development status. Reduced output, but paid for dearly must not become the slogan of the German energy system transformation“, said the Chairwoman of BDEW’s General Executive Management Board.
Better coordination between the Federal Government and the German Laender was imperative for proceeding with the energy system transformation „We do not need 16 individual plans in the 16 German Laender. The sum of all parts does not form a whole. The result obtained is far from the basic planning specified by the Federal Government for the years to come. What we need is a common plan for Germany embedded in an internal European electricity and gas market“, Müller said. It could not be that every Land and in addition many municipalities had their own ideas of self-sufficiency and energy supply without having a look over the edge. „Energy does not stop at national frontiers. One thing will fail: either the idea of an economically reasonable transformation of energy supply or a large part of the promises currently launched by the cabinets of the German Laender“, Müller declared.
Basically, the public continues to have a positive attitude towards the energy transition. But there is increasing concern about the success of implementation. This is shown by first results of a public survey carried out by the Institute for election research (Forschungsgruppe Wahlen) on behalf of the BDEW. Accordingly, 90 percent of the German citizens still consider the energy system transformation to be important or very important (January 2012: 89 percent). But almost two thirds (62 percent) consider that the transformation did not get on well or did not make any progress at all. Hildegard Müller: „The initial euphoria over the energy transition has passed away. We are now at the stage of orientation towards the concrete implementation of the energy system transformation. It is now essential that we play a critical and constructive part in this process.“
Together with this year’s Congress, at which about 1,300 participants are expected, the BDEW also celebrates its five years of existence. „Five years of BDEW also means five years of common history of VDEW, BGW, VDN, VRE and HEA. During these five years we have grown together and have gradually taken a joint position in the public as a strong common voice of the energy and water sector. From the very beginning it was our aim to promote by the force of one opinion the interests of the companies and sectors we represent. I believe that we can be proud of the achievements realised within the BDEW during the past five years“, Müller said.